May 26, 2005

May 26, 2005 | Commentary on

Legislative Lowdown -- Week of May 23

During a recent interview on ABC's "Good Morning America," former President Bill Clinton offered his fellow Democrats some presumably unwelcome tactical advice on Social Security reform. Challenging the "just say no" strategy that Democrats have followed thus far, Clinton said: "I think the Democrats should say what they are for on Social Security in the next couple weeks." Most significantly, Clinton suggested that the Democratic plan "should include an opportunity for people to participate in savings and ownership."

Ever the triangulator, Clinton stopped short of embracing President Bush's plan for personal accounts: "They don't have to do private accounts," he said. But he insisted, "the Democrats should have a plan and they should talk to the President and the congressional Republicans about it."
Translation: Democrats need to engage Republicans in the war of ideas on Social Security with a plan of their own. That plan, moreover, must contain features that will allow Democrats to lay claim to the increasingly attractive rhetorical mantle of "savings and ownership," but without giving Bush a political victory on personal accounts.

Risky Democratic Scheme?

As if on cue, liberal Rep. Robert Wexler (D.-Fla.) offered the first serious proposal on the Democratic side of the aisle to address Social Security's multi-trillion dollar solvency problem. "What I wanted to show the American people," Wexler told CNN, "was that we could resolve the Social Security shortfall without benefit cuts, without raising the retirement age, and without...risky market privatization schemes."

Wexler's proposal calls for an enormous expansion of the Social Security payroll tax. Currently, the tax expires once a worker's earnings reach the $90,000 wage cap. Wexler would impose a debilitating new 6% tax on all income over the cap, adversely affecting 9.8 million workers and 3 million small-business owners. To ensure that the government actually captures this additional revenue, he would freeze the benefits of those high-wage earners, even though they would be paying far more in payroll taxes. Finally, he proposes to reinstitute a lapsed budget rule, known as "pay-go," designed to make it all but impossible for future Congresses to enact offsetting tax cuts.

Though Wexler claims his plan will eliminate 100% of the Social Security system's projected insolvency, experts at the nonpartisan Congressional Research Service disagree, saying it will address only 56% of the shortfall. Eliminating the system's entire $4-trillion unfunded liability, these same experts tell us, would necessitate a payroll tax set at twice the level envisioned by Wexler on all income in excess of $90,000.

A spokesman for House Minority Leader Nancy Pelosi (D.-Calif.) made it clear that Wexler was acting on his own: "This is one member's take, but it is not the Democratic plan." Wexler's Florida colleague, Rep. Debbie Wasserman Schultz (D.), agreed: "The rest of the Democratic caucus is in lockstep" opposition to the President's plan. Democratic House strategists are appalled by this latest development, with one telling the Hill newspaper that Wexler's timing clashed with Pelosi's strategy of not offering a concrete proposal "until we see the whites of their eyes."
Wexler responded simply: "My allegiance to seniors is greater than my allegiance to the Democratic leadership."

Finally, the emergence of Wexler's plan offers ordinary workers the chance to comparison shop between competing Democratic and Republican reform plans. Now voters can contrast the President's approach with one that relies exclusively on trillions of dollars in higher taxes to patch the holes in Social Security. It is the first positive development on this issue since the President's State of the Union address in January.

Oil for Cash

UN Secretary-General Kofi Annan's troubles continue to mount. Mountains of documents obtained from two frustrated investigators who resigned in protest from the UN commission investigating the oil-for-food scandal now offer intriguing evidence that Saddam Hussein systematically used the oil-for-food program to corrupt politicians and influential powerbrokers in Russia and France.

The express purpose of Hussein's dealings, it now appears, was to compromise at least two of the nations with seats-and vetoes-on the UN Security Council and thereby thwart U.S. efforts to enforce UN sanctions on Saddam's vile regime. If proven, these latest allegations call into question the very integrity of the Security Council and pose the most serious challenge yet to this troubled international body.

Rep. Roger Wicker (R.-Miss.), a senior member of the House Appropriations Committee, has fired a shot through the UN control room with a tough resolution calling on Annan to resign. Co-sponsored by more than 50 of his House colleagues, the resolution points out that "the United Nations has become the center of global scandals of international importance," referring not only to the oil-for-food scandal but also to the widespread human rights outrages by UN "peacekeepers" in the Congo and UN ambivalence toward the ongoing genocide in the Darfur region of the Sudan.

Wicker and other senior appropriators such as Rep. Frank Wolf (R.-Va.) are uniquely positioned to use the power of the U.S. purse strings-the U.S. contributes more than 20% of the UN's annual budget-to press for effective reforms. Wicker's resolution ought to be required reading at UN headquarters in New York.
 
Mr. Franc, who has held a number of positions on Capitol Hill, is vice president of Government Relations at The Heritage Foundation.

About the Author

Michael Franc Distinguished Fellow
Government Studies

First appeared in Human Events